from the of-course-that's-the-plan... dept

We were just talking about how three strikes hasn't done anything to actually increase sales. Instead, as many, many people predicted, sales have continued to decline. Of course, perhaps treating your biggest fans as criminals is not a particularly wise strategy. But, then again, the big entertainment legacy players aren't exactly known for wise or thoughtful strategies.

With France, the biggest supporters of a "three strikes (accusations) and we kick you off the internet" plan facing pushback from the government, it appears that the industry folks have hit on their latest ridiculous strategy. Rather than kick people off the internet, why not take a page from copyright trolls, and force them to cough up money. Yes, indeed, it appears that the entertainment industry is looking to turn "piracy" into a "business model" by forcing people they accuse (not convict) of infringement to pay up in large masses. Except, rather than using shady dealings via questionable court procedures, they're just hoping to roll it into existing three strikes plans:

UPFI, (Union of Independent Phonographic Producers), said that it agreed with the opinion of French music rights group SACEM that a disconnection regime should be replaced with warnings along with fines of 140 euros.

PCInpact contacted Jerome Roger, Director General of UPFI, who confirmed the group is indeed in favor of such fines.

This leaning towards cash penalties is also endorsed by Warner Music President Thierry Chassagne. In recent comments Chassange suggested that not enough punishments have been handed out under Hadopi and that a deterrent is necessary.

In other words, if kicking people off the internet isn't getting them to give us more money... how about we skip that middle step and just force them to give us money. It is, clearly, taking a page straight out of the copyright trolling handbook.

According to French publication Numerama, this new direction is basically a done deal in France. And, of course, once it shows up there, expect the same sort of things to start popping up around the globe quickly. The industry doesn't spring stuff like this in just one place alone. There's a global strategy behind it.

from the and-so-it-goes dept

A year ago, we asked what could possibly be the "value" in "cracking down on piracy" if that didn't then lead to increased sales. It's an issue that we've dealt with time and time again. We ask people a simple question: would you rather stop piracy or make more money? Most people note that the latter is the real goal. If the former does not lead to the latter then what good does "stopping piracy" actually do? The answer is none at all. The latest data out of France shows that, despite Hadopi (the administrators of the 3 strikes program) claiming some sort of victory because stats on file sharing are down, the bigger issue is that the sale of recorded music keeps declining. Digital Music News, who normally supports the the "anti-piracy" side of things, has some slides from French labels that show that sales keep decreasing, even as Hadopi highlights a big drop in file sharing and the use of cyberlockers. But all that really matters is this one:

This is the key point that we've been making for well over a decade now. "Fighting" piracy is not the same as making more money. The focus should be on figuring out ways to make money. Even if we believe that copyright infringement is a bad thing, if efforts to stop it are both expensive and ineffective, why continue? It makes absolutely no sense. Instead, let's focus on the areas of the industry that have shown that they are expanding and where there's lots of money to be made for those who embrace them.

Oh, and for what it's worth, you have to imagine that the "declines" reported in file sharing and cyberlockers severely undercounts those things too, as using some rather basic tools can let people hide that sort of information from being collected -- and the efforts by Hadopi to "educate" the public likely educated them about how to use VPNs. It does not appear to have educated them to go back to buying at the same levels as the artificially inflated rates in the past.

from the locking-up-culture dept

In the past, many have noted that proprietary formats for content almost guarantee that certain works will be lost to history. Backwards compatibility becomes a problem, and before long content that could be accessed by tons of programs may be impossible to open just a few years later. For libraries and archvists this is a huge problem -- and it's made even worse when you add DRM to the mix. It appears that even the "anti-piracy" folks in France recognize this, but only to a limited extent.

According to the French publication, Numerama, Hadopi (the agency in charge of stamping out infringement in France), has published an opinion in which it suggests that content creators give the French National Library (Bibliothèque Nationale de France or BNF) works without any DRM on them. As they quite rightly note, in order to better make sure that the culture is preserved and that future archives are accessible, a lack of DRM makes much more sense. They even note that just providing a DRM'd copy with the keys to decrypt it, or with circumvention tools, really isn't sufficient for proper archiving.

That said, the report also then appears to fret about the BNF leaking these unprotected works out into the world. The suggestion seems to be that (wait for it...) the BNF then create its own DRM to lock up the unprotected works that it needs to keep them from getting locked up. In other words, the whole plan is pretty useless anyway.

This is just an opinion, and not binding in any way. So apparently the French government is still considering what sorts of requirements it intends to put on submissions to the BNF, but once again it seems like an overly aggressive "fear of piracy" may actually lead to some bad technical decisions for the sake of "protecting" some works against infringement.

from the three-strikes-is-out dept

France's Hadopi graduated response approach, also known as "three strikes", occupies a special place in the annals of copyright enforcement. It pioneered the idea of punishing users accused of sharing unauthorized copies of files, largely thanks to pressure from the previous French President, Nicolas Sarkozy, who seems to have hated most aspects of this new-fangled Internet thing. Sadly, other countries took up the idea, including the UK with its awful Digital Economy Act, New Zealand, Spain and, more recently, the US.

Hadopi hasn't been going too well. Despite putting out some dodgy statistics, the Hadopi agency hasn't really been able to show that the three-strike approach is doing anything to reduce the number of unauthorized downloads. In the two years that Hadopi has been running, only one person has been brought to court -- and he was innocent, but fined anyway.

As we reported, with Sarkozy gone, the new French President and his team are looking for ways to cut the cost of this scheme. Numerama has details of a recent presentation from the French Minister of Culture and her advisor, Pierre Lescure, about the future of Hadopi (original in French) that confirms the "three strikes" approach is likely to be dropped:

[Lescure] strongly suggests that the graduated response will be abandoned, because it is considered illegitimate and ineffective. "It is likely that a significant proportion of Internet users who have stopped P2P downloads have turned to other types of unmonitoried methods (streaming, direct download) rather than legal offerings, whether free or paid," writes Mission Lescure. Sending out e-mails may be not stopped, but it seems certain that the criminal sanctions will be shelved.

That's probably as close as the French government will ever come to admitting that Hadopi is a failure. Unfortunately, it seems that it will be bringing in three other bad ideas instead:

To put pressure on intermediaries. It is necessary "to make hosts more accountable by forcing them to remove promptly illegal content and to prevent their reappearance, and by strengthening international cooperation in order to punish sites that refuse to comply";

De-list illegal offerings. It is necessary "to reduce the visibility of illegal offerings by acting on the listing in search engines, if necessary through legislation";

"Turn off revenue sources for infringing sites (the "Follow the money" approach), by making intermediaries (advertisers, online payment services) liable."

We've seen all these idea elsewhere -- the first time in ACTA, the second in efforts to make Google skew its search results, and the last in SOPA. They're all terrible in their own ways, but it's good to see France apparently realizing that punishing the public is even worse.

from the soon-to-be-ex-wife dept

Well, here's a nice contrast: just when a judge in the US has ruled that users there have no obligation to lock down their wifi connections, a court in France decides the exact opposite. What makes the story even more significant is that the individual concerned is the first person to be convicted under France's 3-strikes law, generally known as HADOPI.

Not all of the facts of the case have been released, but we do know that he received and apparently ignored the statutory three warnings from HADOPI, and then was summoned to court, where things started to get interesting. As TorrentFreak reports:

the man told the court today that he is incapable of downloading and did not commit the infringements. Supporting his claims he brought into court the person actually responsible for the file-sharing.

That person turned out to be his wife (actually, soon to be ex-wife), who admitted that she had downloaded some Rihanna songs. But as Guillaume Champeau of Numerama pointed out to TorrentFreak, ironically this did not get him off the hook -- on the contrary:

"By saying he knew she was downloading infringing content, but didn’t prevent her from doing so, he self-incriminated."

That's because under the HADOPI law, it is the owner of the Internet connection who is held responsible for any infringement committed with it, so it's the husband, not the (ex-)wife who has ended up being fined 150 euros (about $200) for negligence. That's admittedly less than the 300 euros ($400), with 150 euros suspended, that the French prosecution wanted, and far less than the maximum possible 1,500 euros ($2000) fine. But it's still a stiff price to pay for something he didn't do.

Indeed, he seems to have taken the judgment hard: Guillaume Champeau points out that HADOPI's first victim has now said that he intends to cancel his Internet subscription completely (original story in French). It's hard to see how this kind of result is going to help the growth of digital music in France, and the whole episode is a neat encapsulation of all that is wrong with HADOPI's approach.

from the reality-catches-up dept

Hadopi, the French 3-strikes program that was "the model" for what the recording industry to push around the world -- trying to get countries to force ISPs to kick people offline after three accusations (not convictions) of unauthorized file sharing -- was one of Nicolas' Sarkozy's key programs. During the recent elections, his competitors certainly hinted that they were less impressed by Hadopi, and now that the Francois Hollande administration is in control, it seems that drastically cutting back Hadopi is in the cards. The new culture minister, Aurelie Filippetti, has made it clear that she is not impressed by Hadopi, arguing that it's a huge waste of money for the government, and is on the chopping block as far as funding goes. Furthermore, she thinks the basis of the program, kicking people offline, goes way too far.

“In financial terms, 12 million euros a year and 60 officers, it’s an expensive way to send a million e-mails.... As part of budgetary efforts, I will ask that funding of Hadopi is greatly reduced.”

Furthermore, she noted that kicking people offline seems "a disproportionate sanction," with little evidence that it supports "the end goal." What's that goal? To increase legal access. As we've noted in the past, while Hadopi tried to declare success, the data shows no increase in sales, which certainly suggests a failure.

What happens next will be worth watching. Some suspect that the government won't actually kill off Hadopi, because it's dependent on support from the local entertainment industry. But that may be the least of its concerns. If France actually scales back or scraps Hadopi, expect the legacy US entertainment industry to go absolutely crazy, followed by "diplomatic pressure" from the US, and ridiculous claims that France "doesn't respect" culture and the like. We've seen it before in places like Spain, Sweden, Canada and Israel when those countries put in place copyright regimes that the legacy players didn't like, and it wouldn't be surprising to see the same thing happen in France.

from the take-your-pick dept

actafacts.com, a new pro-ACTA website, made the rounds earlier this month, along with a new report claiming ACTA would create billions of euros in growth and hundreds of thousands of new jobs. Glyn Moody was quick to pull the facts apart. FSF called it "3rd-rate astroturfing" and EDRI suspected "parody." This week actafacts.com resurfaced on fliers at the European Parliament and on the entrance door to the EU Trade committee, prior to an important vote on whether to recommend the European Parliament to reject or accept ACTA on July 4th. The flyer, displaying a majestic container ship plowing through a quiet sea, was as clear in its advocacy -- "A vote against ACTA would be a vote against Europe's economy. Get the facts at actafacts.com" -- as it was unclear about its origins (potentially violating EU rules). Oh, and the container ship image? Yeah, it's infringing according to Jeremie Zimmermann. This, and other last-minute-lobbying-attempts, seem to have had little impact. The trade committee voted down ACTA. However, it's interesting to analyze who's actually behind this now that the monster has reared it's head.

The registration info of actafacts.com is anonymized, but the the HTML source of the page points, rather clumsily, to the c: drive of a Mr. Jeff Hardy.

Jeff Hardy happens to be director of BASCAP, Business Action to Stop Counterfeiting and Piracy, which is a subdivision of the International Chamber of Commerce. The ICC describes itself as "the voice of world business," and is an immensely powerful lobbying group, promoting the specific interests of large member companies.

It's no surprise that American pro-ACTA lobbyists would pull thinly veiled stunts like these, though one would expect them to be able to hire better web designers (and check the HTML code for origin clues). What IS surprising is that the European Commission treats the group's "facts" as such.

One of the problems with the astronomical figures Trade Commissioner De Gucht has been using in defense of ACTA, is that they cover both supposed losses due to counterfeiting of tangible (physical) goods, and non-tangibles, ie. digital / Internet piracy all conflated together. While he can lean on credible, reasonably well-sourced numbers on physical counterfeiting from the OECD, there are none on Internet piracy. That's because, as OECD economist Danny Scorpecci explained to me, the data is simply too unreliable; too many factors need to be considered.

So, I repeatedly asked De Gucht's office to provide numbers backing the claim that internet piracy hurts the EU economy, and causes job losses in the creative sector. His team returned with one report: Building a Digital Economy: The Importance of Saving Jobs in the EU's Creative Industries from TERA consultants, commissioned by -- you guessed it -- BASCAP, Jeff Hardy's team. The report "predicts losses due to [digital] piracy to reach as much as 1.2 million jobs and €240 billion in retail revenue by 2015 (...) assuming no significant policy changes." I asked whether the commissioner had taken into account the clearly biased and, according to the SSRC, misrepresentative nature of the report's claims.

John Clancy, EU Trade Spokesperson, rejected that criticism offhand, without actually responding to it: "such analysis does not suddenly make the report invalid and the information contained in it unfounded". Well, that depends. Joe Karaganis of the Social Science Research Council dismissed the TERA report entirely because of its use of "a methodology developed by Stephen Siwek in a series of papers commissioned by the MPA, RIAA, and ESA [aiming to] expand the debate about piracy beyond claims of losses to specific industries to losses to national economies, including especially lost jobs". Karaganis argues that the contrary may well be the case, and that the EU may well "realize a strong net welfare benefit from audiovisual and software piracy" because money is spent elsewhere, not lost, and because the supposed job losses would happen in the US, thus affecting the trade balance positively for the EU. Siwek's analysis does not even take into account this possibility.

When I spoke to Jeff Hardy in April about the report he defended the methodology and the use of Stephen Siwek as an advisor: "Our mission is to paint a picture with numbers. We try to be conservative, even though the numbers are gigantic. This is an illegal business. This is black market. We don't have all the numbers, but someone has to step up. We need to have an understanding of the magnitude of the problem, that this is a real, economic loss." And, apparently, the way to do so is not to address the facts, but to just make up numbers.

Hardy told me that the ICC hired TERA after their HADOPI report, which concluded that France would lose 10,000 jobs in the creative industry by 2012 unless France adopted the "3 strikes" law. This report uses the same methodology, dubbed "copyright math" by Rob Reid in his $8 billion iPod TED Talk. So, why, when everyone else -- even the US Government -- admits these inflated piracy numbers are bogus, does the EU Commission keep repeating them? This must be a successful turn of events, I asked Jeff Hardy? "Well, assuming our number is big enough, it's successful", he replied.

Yes, that's right, in a refreshing moment of candor, Hardy appears to be admitting that all he cared about was making sure the number was "big enough," not particularly "accurate." That seems like a "fact" worth keeping in mind when you judge these "actafacts."

from the just-what-we-need dept

Update: Dah. Got fooled on the date. Someone had sent that one anonymously, and we missed that the date was from back in March. Others are reporting the program won't go into effect until the fall.

At this point, it's no surprise, but the RIAA's Cary Sherman has now confirmed that (as had been previously stated) the big ISPs (Comcast, Time Warner Cable and Verizon) will be ready to kick off their "six strikes" plan this weekend. Apparently, the idea of actually giving the public a seat at the table, and looking into whether or not this made sense, wasn't seriously considered. Of course, none of this will do anything to bring revenue back to RIAA or MPAA members. It won't even do anything to stop infringement in the long term. As always, people will figure out ways around this. We've already seen the massive failure of an even stricter program, Hadopi, in France. Can anyone seriously claim that this will somehow work better in the US? Instead, it won't be long until we hear the stories of false accusations, or families who have their internet connection limited or locked down because a neighbor maybe downloaded some infringing content. Little Susie needs to do some research for her homework? Not tonight, kids. Hollywood has to teach you a lesson. Of course, the only real lesson is that the entertainment industry needs to stop blaming customers, and start looking inward, at its own failure to innovate. Pissing people off by limiting their internet connections is not a productive path forward.

from the this-is-called-denial dept

We've certainly seen the entertainment industry continually try to pretend that Hadopi's clear failure is a success story. However, sometimes it seems to go from just massaging the numbers into outright denial. That seems to be the case with Nicolas Seydoux, who is both the president of a French film company and the head of the local anti-piracy organization, ALPA.

“Between 15 May and 15 December 2011, no French film has been downloaded from the Internet,”

Oddly, he doesn't even seem to distinguish authorized online movie services from unauthorized. He just insists that no films have been downloaded. At first, I thought that perhaps he really meant that no new French films had been leaked online, but that's not what he says. He literally claims that zero French films were downloaded during those seven months. I guess he's declaring victory for his anti-piracy organization, but it's impressive how the pure bubble he's living in does not even come close to reflecting reality.

from the keeping-everyone-happy dept

Whatever you might have thought of his policies, Nicolas Sarkozy probably had more impact on European copyright policy than any other EU politician. He consciously tried to the lead the way in bringing in more extreme copyright enforcement, most notably with the "three strikes" HADOPI law.

That alone makes his defeat in the recent French presidential elections significant: there are no signs that his successor, François Hollande, will take anything like the personal interest in copyright that Sarkozy did. But that also makes it very hard to predict what effect Hollande's election will have on the French and European copyright scene. Nonetheless, the French site Numerama has published an early attempt to lay down some rough ideas of what happens next (original in French.)

Things are complicated by Hollande's shifts in position on this issue. That's because in the run-up to the election he attempted to sweep up the anti-Sarkozy voters who hated HADOPI without alienating the creative industries who were all for strict enforcement of copyright. The result is a series of vague promises and pronouncements without much in the way of concrete plans.

For example, as Numerama explains, starting on 3 July there will be a "post-HADOPI reflection," led by a government commission that will draw up new measures forming what Hollande has termed "Act 2" for French culture. That commission will have the unenviable task of trying to keep everyone happy -- and probably end up pleasing no one. Meanwhile, it seems, the HADOPI machine will rumble on: Hollande has not announced any plans to suspend the system while the commission draws up its response. That's regrettable, since it implicitly accepts the validity of the "three strikes" punishment system.

However disappointing Hollande's vague policies may be for those looking for a clean break with the past, there is always the hope that now that he is elected, he may bring in bolder measures that restore some balance to copyright in his country. In any case, the fact that France is now taking its time to re-consider copyright and creativity altogether, rather than simply continuing to charge down the road of harsh enforcement, is likely to have a positive knock-on effect in the European Union. With Sarkozy gone, the copyright maximalists there have undoubtedly lost their most outspoken and powerful ally.